Somehow, We’re Large-Small

When you look past the good-news headline, there’s some interesting discussion in “NYC’s Small Business Recovery: Patterns of Growth in a Changing Economy”, a report from the city’s Economic Development Corporation. The showy headline is that “Total small businesses in NYC reached a new record high” – in other words, that there are more small businesses in the city than every before. That really is good news and I’m glad that OSE is part of it. (If you’re wondering, “small business” is defined for this study as 50 or fewer employees.)

When you get into the statistics, some weirdness happens. Small businesses employ just under a million people in the city, about 3 percent fewer than in 2019. The smallest possible businesses – with a sole proprietor as the only employee – increased in number by ten percent, while small-but-not-the-smallest businesses (2 to 5 employees) decreased in number by just over a percent and small-but-large-for-small businesses (6 to 50 employees) decreased in number by 3 percent. Given the massive, if temporary, unemployment caused by Covid in 2020, and the dislocations in Manhattan caused by temporary work-from-home during Covid followed by permanent hybrid and work-from-home afterwards, it sure sounds like some people who lost their jobs have gone entrepreneur and started solo companies. I’m not knocking that – I started OSE as a solo – but it’s more of looking to make lemonades with the unemployed lemons you’ve been handed than it is following a dream.

If you go to page 4 of the report, there’s a map showing where new small businesses have started. There’s a huge cluster in midtown, a smaller but still large cluster downtown, a cluster in downtown Brooklyn, a cluster in Williamsburg, and a cluster in downtown Flushing. Those five areas may have a bunch of characteristics in common, but the ones that jump out at me are dense population and dense foot traffic.

In any case, interesting reading. And I’m still shaking my head that we’re a large small busienss.